Marney Cox, San Diego Association of Governments

Official estimates of the first quarter GDP keep getting worse and worse. The latest estimate is -2.9%, easily the worst non-recession quarter in modern history. Moreover, there does not seem to be much bounce back in the second quarter, leading some economists to forecast 2014 weaker than 2013. The problem isn’t that the economy isn’t recovering. The problem is that it’s recovering too slowly for us to see the progress. It’s like watching a glacier flow downstream. Adding to the surprising disappointments have been low-quality job growth, sluggish wages, limited purchasing power and fewer people participating in the labor force.

Continued low interest rates
6% (2)

Vibrant stock market
45% (14)

Resilience
3% (1)

Initial public offerings (IPOs)
3% (1)

Other
0% (0)

Phil Blair, Manpower

American businesses have weathered the 2008-20012 recession and come out stronger and with healthier bottom lines. How did they do this? When any calamity strikes, companies have a choice of collapsing or burrowing in to do whatever they have to do to continue to exist. Typically it means cutting any and all expenses as fast as possible. It means monitoring those expenses, typically raw materials or personnel, depending on the industry, and reacquiring that overhead as slowly as possible. If the expense is staffing companies look for better uses of technology, outsourcing, or literally doing without. Did we really need five regional managers when we seem to be doing fine with three? And it has worked for many companies. They have been able to rebuild their profits with less personnel. The big question is what this means for San Diegans who are still looking for jobs in a market where many jobs have disappeared, never to come back.

Kelly Cunningham, National University System

Although I anticipated lackluster growth for the year, the actual 2.9 percent decline in first quarter GDP was a surprise. Even with higher growth to be reported for the second quarter (the eventual third revision in three months will also likely be less than stellar), it will be hard to overcome such a high drop for the first half of 2014. The weakness cannot all be attributable to weather. Larger factors are the implicit tax hikes implemented under Obamacare, which amount to the third highest tax increase since 1946. Uncertainties over energy prices are also contributing to stagnating economic momentum.

Gina Champion-Cain, American International Investments

I'm quite surprised by the economy's resiliency under the buffeting winds of international turmoil and domestic policy impasse. We have seen no significant growth-oriented policy implementation. Worldwide, we have seen one conflict unfold after another. Events in Ukraine, Syria, Sudan, Iraq, Afghanistan and Nigeria all have the potential to affect regional stability and global energy pricing. Yet, the U.S. economy has been, for the most part, relatively unfazed by such threats.

Alan Gin, University of San Diego

The most surprising thing to me about the economy in the first half of 2014 has been that interest rates have not increased. In fact, they have decreased, with yield on the 10-year Treasury bond falling about half a percent and the 30-year mortgage rate falling about a third of a percent. With the Federal Reserve cutting back on its easing, the expectation was that interest rates would increase. They still might by the end of the year, but in the interim, the low rates should continue to boost the economy. The housing market in particular should benefit, but there are problems there with low inventory and high prices.